Vicente Sederberg Representing Hemp Industry In Federal Lawsuit Against The DEA

DISTRICT OF COLUMBIA:  A national hemp trade association and a South Carolina-based hemp company have filed a federal lawsuit against the Drug Enforcement Administration, challenging a rule the agency implemented last month that could have far-reaching consequences for the U.S. hemp industry.

The petition filed Friday afternoon in the U.S. Court of Appeals for the District of Columbia Circuit asks the court to review an interim final rule, “Implementation of the Agriculture Improvement Act of 2018,” which was promulgated by the DEA on August 21. The lawsuit claims the rule is unlawful because it exceeds the DEA’s legal authority and violates the Agriculture Improvement Act of 2018, also known as the farm bill. The petitioners also argue that acting DEA administrator Timothy Shea, who is individually named as a respondent along with the agency, issued the interim final rule without observing procedures required by law.

The DEA’s interim final rule clarifies that all hemp derivatives or extracts exceeding 0.3% THC shall remain Schedule I controlled substances. This could be interpreted to include intermediate hemp derivatives that temporarily exceed 0.3% during processing, but contain less than 0.3% in final products. As such, it improperly establishes the DEA’s authority over legal hemp activities, which is contrary to the plain language and intent of the 2018 farm bill, according to the petitioners.

The petitioners in the lawsuit are RE Botanicals, Inc. and the Hemp Industries Association.

RE Botanicals, Inc. is a hemp manufacturer and retailer based in South Carolina. In 2019, it acquired Palmetto Synergistic Research LLC (dba Palmetto Harmony), which was founded to provide lawful, reliable, and high-quality hemp products.

“We are a small, woman-operated company,” said Janel Ralph, CEO of RE Botanicals. “The DEA’s new rule could put us out of business overnight.”

HIA is a trade association that represents approximately 1,050-member hemp businesses, including approximately 300 hemp processors and individuals involved in, or impacted by, the manufacture, distribution and/or sale of hemp extract and other products lawfully derived from industrial hemp. HIA successfully challenged DEA rulemaking in 2003, when the agency amended federal regulations to include naturally occurring THC within the definition of “synthetic THC,” thereby treating it as a Schedule I substance despite it falling outside the definition of marijuana in the Controlled Substances Act.

“When Congress passed the 2018 farm bill, it explicitly carved hemp and its derivatives out of the Controlled Substances Act so that hemp can be regulated as an agricultural commodity,” said HIA President Rick Trojan. “The DEA’s interim final rule could create substantial barriers to the legal manufacturing of hemp-derived products, a critical component of the hemp supply chain, and devastate the entire hemp industry. Although the DEA states that is not its intention, the rule must be amended to ensure hemp remains an agricultural crop, as Congress intended.”

The petitioners are represented by leading hemp industry attorneys at Vicente Sederberg LLP, Kight Law Office PC, and Hoban Law Group, along with appellate attorneys from Yetter Coleman LLP, which has received national attention for its work against the DEA in the realm of cannabis research.

“The DEA implemented this rule without following proper rule-making procedures, such as providing the public with notice and the opportunity to comment,” said Shawn Hauser, a partner at Vicente Sederberg LLP and chair of the firm’s hemp and cannabinoids practice. “The petitioners believe legal action is necessary to protect the lawful U.S. hemp industry that Congress intended to establish when it enacted the 2018 farm bill.”

WASHINGTON: WSLCB September 16 Board Activity

WASHINGTON: The WSLCB Board met yesterday, September 16, 2020. During the meeting, the following actions were taken:

WSLCB Virtual Listen and Learn Forum Session #2: Rules Regarding Marijuana Vapor Products

WASHINGTON:  The Washington State Liquor and Cannabis Board (WSLCB) is hosting two Listen and Learn forums to consider establishing new and amending existing sections of rule concerning marijuana definitions and marijuana vapor products. This is the second of two planned sessions. The full text of the draft conceptual rules are provided here.

For this session, we are discussing only draft conceptual rule sections 314-55-550 to implement House Bill 2826 pertaining to marijuana vapor products, and the Marijuana Vapor Product Disclosure Form. The Disclosure Form is provided here.

Please join us virtually on Tuesday, September 29, 2020, from 2:00 p.m. until 4:00 p.m. via WebEx.

**Attendees wishing to provide feedback are encouraged to participate early in the meeting, as the meeting may end early dependent on level of participation.**

Background
On March 25, 2020, HB 2826 passed the legislature in response to concerns related to marijuana vapor product and vapor related lung illnesses. The bill contained an emergency clause, and in its intent section, found that “recent reports of lung illnesses associated with vapor products” demanded “serious attention by the state in the interest of protecting public health and preventing youth access.

HB 2826 provides that the Board may adopt rules prohibiting any type of marijuana vapor product device, or prohibit the use of any type of additive, solvent, ingredient, or compound in the production and processing of marijuana products, including marijuana vapor products. However, before adopting either of these types of rules, the Board must have determined, following a consultation with the Department of Health (DOH), or any other authority the Board deems appropriate, the device, additive, solvent, ingredient, or compound may pose a risk to public health or youth access.

HB 2826 authorizes the Board to require marijuana processors to submit, under oath, to the Department of Health, a complete list of all constituent substances and the amount and sources of all constituent substances in each marijuana vapor product. HB 2826 also provides that Board may adopt rules prohibiting the use of a characterizing flavor in marijuana vapor products.

Rules are needed to implement the provisions of HB 2826, and to establish definitions for terms including, but not limited to “characterizing flavor,” botanical terpenes,” and others.

The Pre-proposal Statement of Inquiry filed by the Liquor and Cannabis Board may be found here.

Meeting Details
An agenda is attached. Please come prepared to offer feedback and suggestions regarding this rule section.

If you wish to participate virtually, we’d like to offer the following reminders:

  • Virtual participation will be structured to allow one speaker at a time through a hand-raising feature on WebEx.
  • If you experience difficulty with audio or visual elements of virtual participation, please be patient.

Please remember that we are still in the developmental phase of rulemaking, and there are not yet any proposed or final rules amendments. To help you prepare for this listen/learn/contribute forum, please review the guidance document prepared for this and future forums.

Questions? Contact Casey Schaufler at casey.schaufler@lcb.wa.gov

To join the WebEx meeting online:
https://watech.webex.com/watech/j.php?MTID=m208eaad1ec16f31cfccdf6970963e1cb


To join the WebEx meeting via audio conference only:
Dial: (415) 655-0001
Access Code: 372 115 47

OLCC Compliance Education Bulletin: Medical Sales To A Designated Caregiver

OREGON: The OLCC has added a “Bulletins” section to its Recreational Marijuana Program website with important information for licensees and marijuana worker permit holders.

The Oregon Liquor Control Commission is providing the following information to: recreational marijuana licensees.

The bulletin is part of OLCC’s compliance education. It is important that you read it, and understand it.If you don’t understand it please contact the OLCC for help.

Failure to understand and follow the information contained in this bulletin could result in an OLCC rules compliance violation affecting your ability to work or operate your business.

A bulletin previously issued by Metrc inadvertently provided the incorrect date for when the CTS functionality change takes place.  The change in Metrc is effective starting September 14, 2020.

Bulletin CE2020-04 covers the following issues:

  • Medical Sales to a Caregiver
  • Sales Limits to Caregivers and Patients
  • New Metrc Functionality – Designating Caregiver Sales

Compliance Education Bulletin CE2020-04 provides updated guidance on medical sales to a Designated Caregiver, sales limits caregivers and patients, and changes in Metrc functionality for caregiver sales.

Medical Sales to a Designated Caregiver

The Oregon Medical Marijuana Program (OMMP) provides for patients to designate a caregiver who can purchase and possess marijuana items for the patient. The caregiver’s card references both the caregiver’s and patient’s registration number.

Effective September 14, 2020 new functionality in the Cannabis Tracking System (CTS), Metrc, now allows retailers to designate sales as “caregiver” sales, in addition to consumer and patient. When a caregiver sales is recorded, either manually in Metrc or through API or CSV upload, the retailer must input both the patient and caregiver numbers.

Rules allow for a patient and their caregiver to jointly possess up to 24 ounces of usable marijuana. This is to say, a retailer may sell up to the daily limit under both the patient’s and caregiver’s cards under the caregiver sales. This will go into effect when the daily sales limit returns to 8 ounces on September 18, 2020.

The bulletin describes the new functionality in Metrc and provides a step by step guide to entering a caregiver sales manually in the system. Metrc has previously provided API partners with details on this addition, so they should be ready to use this functionality in their systems.

Questions regarding the contents of this bulletin may be sent to marijuana.cts@oregon.gov.

NY Senator Schumer Calls On USDA To Halt Hemp Reg Implementations

Schumer: Amend Hemp Regulations And Let Budding Industry Take Flight In Upstate NY

NEW YORK:  After successfully pushing for an extended comment period to allow Upstate New York hemp farmers to share their concerns with the final rule, U.S. Senator Charles E. Schumer today called on the United States Department of Agriculture (USDA) to delay the issuance of a U.S. Domestic Hemp Production Program final rule until 2022 and allow hemp growers and producers across the country and in Upstate New York to continue to operate under the 2014 Farm Bill pilot program regulations until that time. Schumer said with the economic devastation of the COVID-19 pandemic across all sectors, implementing additional regulations would crush the budding hemp industry.

“When it comes to an industry as promising as industrial hemp in Upstate New York, the feds must do everything they can to nurture its potential. Regulating this rapidly-emerging industry is a must, but the timing of new regulations is important and the current economic crisis must be considered,” said Senator Schumer. “That’s why today I’m urging USDA to delay their issuance of a final rule until 2022 so the hemp industry across the country and in Upstate New York has a chance to grow and create good-paying jobs at a time when jobs are needed the most. Delaying new regulations will help pull New York along in the recovery process as the nation deals with the impacts of the pandemic.”

Allan Gandelman, President of New York Cannabis Growers and Processors Association said, “There are over 700 registered hemp farmers across New York who would be negatively affected by the USDA’s Interim Final Rule on hemp. The costs and bureaucracy of implementing the new rules as written create unnecessary financial burdens on farmers and our state agencies. The existing hemp pilot program has been sufficient in making sure farmers are complaint with all testing and public safety protocols. We would like to see the pilot program extended until 2022 and the USDA modify the program to let hemp become a widespread agricultural commodity like Congress intended by the passage of the 2018 Farm Bill.”

Schumer explained, prior to the pandemic, the industrial hemp industry had begun to show significant growth in New York, adding a considerable number of good-paying jobs and bringing in significant revenue to the state, making it an indispensable crop in New York’s agricultural future. Operating under the full benefits of the 2018 Farm Bill, hemp farmers have reported difficulty integrating the Interim Final Rules into their operations, Specifically, Schumer said, the cost of complying with the Rules has proven to be suffocating for the emerging industry. Compliance costs for reporting alone would be $17,363.40 according to USDA calculations, and testing would add over $700 per sample.

The senator said these costs are simply too high for the budding industry to shoulder at a time when New York and the entire country is experiencing an economic crisis. Additionally, Schumer noted, implementing the Interim Final Rules now, also requires states to alter their Pilot Program budgets to meet standards, something which states slammed with COVID-related issues simply cannot spare the time and resources for.

Schumer also pointed out in light of COVID concerns, the timing and testing outlined in the Interim Final Rules would likely push farmers to rush harvests and increase the number of people working in facilities at once, leading to higher risk of COVID transmission among workers. The senator says that delaying implementation until January 2022 and allowing states to continue operating under the 2014 Farm Bill will address these issues, protecting both the hemp industry in New York and farm workers from potential COVID spread.

Senator Schumer’s letter to USDA Secretary Perdue appears below:

Dear Secretary Perdue,

I write in regard to deep concerns that USDA’s U.S. Domestic Hemp Production Program Interim Final Rules will hinder the advancement of the hemp industry and create significant compliance costs both for State Governments and producers. Despite these concerns being reflected in the numerous comments submitted on behalf of industry trade groups, businesses, and State Agriculture Departments during the extended public comment period, no significant changes were made. As you know, the 2018 Farm Bill removed federal regulatory restrictions from industrial hemp production, manufacturing, and sales with the intent of developing a new agricultural commodity for United States farmers. The timing of implementation of the Interim Final Rules, especially during the COVID crisis, will create extreme disruption in this nascent industry. I ask that you delay the issuance of a final rule until January 2022 and allow states to continue to operate under the 2014 Farm Bill pilot program authority until then.

In New York, the industrial hemp industry has started to grow significantly, with new farms and businesses emerging and existing ones expanding operations. This has brought considerably better paying jobs and revenue to Upstate New York, making industrial hemp a critical new part of the state’s agricultural future. However, as industrial hemp farmers and businesses explore the full benefits of the 2018 Farm Bill, they have experienced serious difficulty integrating the Interim Final Rules into their operations. Particularly in the current COVID climate, I see many farmers and processors in New York struggle with incorporating these changes into the existing state Pilot Programs. In a time when farmers and producers struggle with economic uncertainty, the implementation of the Interim Final Rules will create costs without the support of offsetting revenues. USDA calculated compliance costs for reporting alone of $17,363.40 with testing adding approximately an additional $714.50 per sample (see 7 CFR Part 990, 58537 and 58545).

These costs do not just impact businesses across the United States but also state budgets that must alter their Pilot Programs to meet the demands of the Interim Final Rules. With bandwidth completely consumed by COVID concerns, the state regulatory agencies cannot focus on implementation of the Interim Final Rules. At this point, only 19 states have approved plans in place and enforcement efforts will deal a significant economic blow to the industry.

Lastly, I have concerns that the Interim Final Rules will potentially create public health issues in our current COVID environment. As we move into harvest season, farmers will need to operate with as much certainty as possible but timing and testing requirements will likely create bottlenecks that will push farmers to rush harvests. The potential for greater numbers of people working in facilities to meet the rush may create opportunities for COVID to spread among farm workers.

The Interim Final Rules provide a first step in developing regulations for the hemp industry. The critiques from the comment period will provide USDA with areas to consider revisions that further encourage economic opportunity for farmers and producers. However, COVID creates hurdles for states and producers to comply with the Interim Final Rules. Under the circumstances, the Interim Final Rules will harm the very businesses we hoped to help with this new agricultural commodity. We can easily remedy this situation by delaying implementation until January 2022 and allow states to continue under the 2014 Farm Bill until then. This will allow USDA to address some of the more pressing regulatory critiques while giving states and producers additional time to come into compliance.

Once again, I appreciate your efforts to help establish guidelines to develop a thriving American hemp industry. Thank you for your attention to this important matter and please let me know if I can be of any assistance.

Sincerely,

NEW ACLU REPORT: Despite Marijuana Legalization Black People Still Almost Four Times More Likely To Get Arrested

A TALE OF TWO COUNTRIES: RACIALLY TARGETED ARRESTS IN THE ERA OF MARIJUANA REFORM DETAILS MILLIONS OF RACIALLY TARGETED MARIJUANA ARRESTS MADE BETWEEN 2010-2018

NEW YORK: The American Civil Liberties Union today released a new report showing that Black people are 3.64 times more likely than white people to be arrested for marijuana possession despite comparable marijuana usage rates. Additionally, although the total number of people arrested for marijuana possession has decreased in the past decade, law enforcement still made 6.1 million such arrests over that period, and the racial disparities in arrest rates remain in every state.

The reportA Tale of Two Countries: Racially Targeted Arrests in the Era of Marijuana Reformdetails marijuana possession arrests from 2010 to 2018, and updates our unprecedented national report published in 2013, The War on Marijuana in Black and White. The disturbing findings of this new research show that despite several states having reformed marijuana policy over the last decade, far too much has remained unchanged when it comes to racial disparities in arrests.

Key findings include:

  • Law enforcement made more than 6.1 million marijuana-related arrests form 2010-2018. In 2018 alone, there were almost 700,000 marijuana arrests, which accounted for more than 43 percent of all drug arrests. In 2018, law enforcement made more marijuana arrests than for all violent crimes combined.
  • Despite legalization in a number of states, it is not clear that marijuana arrests are trending downward nationally. Arrest rates have actually risen in the past few years, with almost 100,000 more arrests in 2018 than 2015.
  • In every state, and in over 96 percent of the counties examined, Black people were much more likely to be arrested than white people for marijuana possession. Overall, these disparities have not improved. On average, a Black person is 3.64 times more likely to be arrested for marijuana possession than a white person, even though Black and white people use marijuana at similar rates. In 10 states, Blacks were more than five times more likely to be arrested.
  • In states that legalized marijuana, arrest rates decreased after legalization, however racial disparities still remained.

A Tale of Two Countries: Racially Targeted Arrests in the Era of Marijuana Reform comes at a time when the criminal legal system is overwhelmed by the public health crisis presented by COVID-19 that demands expedited decarcercal action to safeguard the lives of those incarcerated in and employed by jails and prisons. The reforms recommended in this report provide a roadmap for reducing marijuana arrests and criminalization as governors, prosecutors, judges, and other stakeholders across the country grapple with the harms presented by the public health crisis and take steps to release people from jails and prisons.

“Many state and local governments across the country continue to aggressively enforce marijuana laws, disproportionately targeting Black communities,” said Ezekiel Edwards, director of the Criminal Law Reform Project at the ACLU and one of the primary authors of the report. “Criminalizing people who use marijuana needlessly entangles hundreds of thousands of people in the criminal legal system every year at a tremendous individual and societal cost. As a matter of racial justice and sound public health policy, every state in the country must legalize marijuana with racial equity at the foundation of such reform.”

To combat the racial disparities rampant in marijuana-related arrests, the ACLU is calling not only for an end to racialized policing, but also for full legalization of marijuana use and possession and specific measures to ensure legalization efforts are grounded in racial justice. This includes pressing for passage of the MORE Act, which  aims to correct historical injustices of the failed War on Drugs that has terrorized Black communities by decriminalizing marijuana at the federal level, reassessing marijuana convictions, and investment in economically disadvantaged communities.

The full report is available here.

 

Ohio Board Of Pharmacy Awards Second Dispensary Certificate Of Operation In Newark

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OHIO: The State of Ohio Board of Pharmacy today awarded a Dispensary Certificate of Operation to Ohio Grown Therapies, located at 1246 N. 21st St., Newark.

The Board has now issued 48 Dispensary Certificates of Operation.

The interactive map of Dispensaries with Certificates of Operation will be updated within two business days.

Ohio Board Of Pharmacy Awards Third Dispensary Certificate Of Operation In Cincinnati

State_of_Ohio_Board_of_pharmacy_logo2COHIO:  The State of Ohio Board of Pharmacy today awarded a Dispensary Certificate of Operation to Have a Heart Cincy, located at 8420 Vine St., Cincinnati.

The Board has now issued 47 Dispensary Certificates of Operation.

The interactive map of Dispensaries with Certificates of Operation will be updated within two business days.

WSLCB Issues Emergency License Suspension For Herban Legends In Seattle

wslcbWASHINGTON: The Washington State Liquor and Cannabis Board (WSLCB) issued an emergency suspension and revocation of marijuana retailer “Herban Legends,” License No. 420291, located at 55 Bell St. Suite 100, Seattle, WA 98121. The licensee has held a marijuana retail license since February 2016.

This emergency suspension follows complaints from employees, vendors, nearby businesses and Seattle Police Department (SPD) officials. Concerns include the licensee engaging in erratic and criminal behavior on the license premises. The substance of the complaints was validated by the WSLCB during onsite visits, interviews with complainants, and the SPD.

There have been several SPD-involved incidents at the license premises, including a Nov. 21, 2019 incident where SPD responded to a report that the licensee was throwing marijuana products and other merchandise into the parking lot and street of the license premises. Upon arrival, SPD confirmed marijuana products were on the ground outside the business and they were told by individuals in the parking lot that the owner was giving away product – a violation of state law. Over the past several weeks there have been additional law enforcement actions and arrests of the licensee.

Due to the public safety risk of the licensee being unable or unwilling to demonstrate that cannabis product is beings secured on the premises and entered into the state traceability system, the Board issued the emergency suspension. Because the license is held by a single individual, the legal oversight of the business cannot be temporarily assumed by another individual.

Emergency suspensions represent an extraordinary exercise of the state’s power and the WSLCB is mandated to ensure that an emergency suspension is reasonable, justifiable and legal in every way. The WSLCB issued one emergency suspension in 2017, four in 2018 and two in 2019.

Ohio State Board Of Pharmacy Seeking Input On Proposed Rule Amendments

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OHIO: The State of Ohio Board of Pharmacy is seeking public input on proposed medical marijuana: (1) dispensary, (2) patient and caregiver and (3) form and method of administration rules. To view the proposed rules, including instructions on how to provide comments, visit: https://www.medicalmarijuana.ohio.gov/Rules.